usda loan to much money in bank?

[Anonymous]

hello all

  First time poster and planning on buying next month. Does anybody know if you will be disqualified from getting a usda guaranteed loan if you have enough for a normal down payment. I was looking at the guidelines in an earlier post on here and it said buyer must not have sufficient funds for a down payment. Im only planning on spending about 80,000 and will have way over 15,000 in savings. Just wonderin if that will actually get me denied because i have enough to do an fha. I do not want to deplete my savings if i dont have to. Hope that made sense. Im 670 middle score.I will be 3 years from sale of my foreclosure, and 4 years from BK. Trying to start over and hoping everything will go smooth. After my BK i told myself i would never live payday to payday again and have succeeded so far. I would hate to be declined becasue im doing things right for once.

[Anonymous]

I don't think so. The biggest difference between FHA and USDA is location eligibility. The home would have to be in a USDA qualified area, i don't think downpayment has anything to do with that but maybe someone that knows for sure can chime in here.

[Anonymous]

if you go the usda rural development thread on the next page somebody included a link to the underwriter guidlines for usda and it says it there. If anybody has had any issues with this i would love to hear about it.

[medicgrrl]

I think that would be a reason for denial.  USDA is a program for low to moderate income buyers who can't afford to save for a down payment because of their income level.  USDA has limited funds and if you are eligible for other financing then you are expected to apply for it.  USDA is also supposed to be a beginning loan until someday when you are able to refinance to another program and free up the funds for USDA again so others may take advantage of the program.  It really isn't meant for borrower who just don't want to use their money for the down payment. 

[Anonymous]

USDA is also supposed to be a beginning loan until someday when you are able to refinance to another program and free up the funds for USDA again so others may take advantage of the program.  

Where did you get that? Maybe the direct loan is like that? There has certainly been nothing I've seen at any stage of the process with a guaranteed loan to suggest that it should be refinanced with another method at some future time.

I would be interested to see what the outcome is for the OP. I really don't know how it would be treated. In our case we had funds for a downpayment but couldn't qualify for FHA due to a foreclosure that was dragged out by the bank.

Also, while USDA doesn't require reserves, we're working with a conservative lender that most definitely wants to see some money in the bank.

[Anonymous]

Well im definetly considered low income for california. me and my wife only make 60000 a year working full time. We dont qualify for the loan direct from usda but do qualify for the guaranteed. I have that much in the bank because after my bk i told myself no more loans. If i dont have the cash i dont buy. We did get one cc to restablish some credit. I was able to pay off my cars so my only payment was rent and utilities. Thanx everybody for the answers so far. If anybody else would like to comment i would be glad to hear it. Still wonderin if this will be a go or not. Dont wanr to waste my time on usda if i just need to go fha.

[medicgrrl]

 

(b) Program objective. The basic objective of the guaranteed RH loan program is to assist eligible households in obtaining adequate but modest, decent, safe, and sanitary dwellings and related facilities for their own use in rural areas by guaranteeing sound RH loans which otherwise would not be made without a guarantee. Guarantees issued under this subpart are limited to loans to applicants with incomes that do not exceed income limits as provided in exhibit C of RD Instruction 1980-D (available in any RHCDS office).

§1980.346 Other eligibility criteria.

The applicant must:

(a) Be a person who does not own a dwelling in the local commuting area or owns a dwelling which is not structurally sound, functionally adequate.

(b) Be without sufficient resources to provide the necessary housing and be unable to secure the necessary conventional credit without an RHCDS guarantee upon terms and conditions which the applicant could reasonably be expected to fulfill.

(c) Be a natural person (individual) who resides as a citizen in any of the 50 States, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Marianas, Federated States of Micronesia, and the Republics of the Marshall Islands and Palau, or a noncitizen who resides in one of the foregoing areas after being legally admitted to the U.S. for permanent residence or on indefinite parole.

(d) Possess legal capacity to incur the loan obligation and have reached the legal age of majority in the State or have had the disability of minority removed by court action.

I am trying to locate the answer to your other question.  Their manual is huge so it may take a while

[Anonymous]

So, is FHA conventional credit?

I think the OP needs to talk to a USDA lender to find out if they qualify or not.

[Anonymous]

I agree with deemac, talk to a USDA lender and find out for sure.

Our LO gave us the impression they offer the no downpayment 102% financing because they're trying to get people to buy homes in rural areas. I believe there are income limitations and there may be limitations on how much you can have in the bank but 15k doesn't seem like an awful lot to me.